What one employee really costs, by state

The employer’s own payroll taxes on one employee paid $60,000 a year in 2026, lowest first: Social Security, Medicare, federal unemployment tax, state unemployment tax at the rate a new employer pays, and the state programs an employer pays. The last column is what is withheld from the employee’s pay, which is not a cost to the business. Where a state sets a new employer’s rate by notice, the table shows the range or the minimum.

Social Security at 6.2% of each employee’s wages up to the wage base, and Medicare at 1.45% with no cap. Federal unemployment tax (FUTA) is 6.0% of the first $7,000 of each employee’s wages, or 0.6% after the full 5.4% credit for paying state unemployment tax on time. State unemployment tax is charged on a first slice of each employee’s wages that the state sets, at a rate the state assigns. Some states add job training taxes or a share of paid family leave.

Benefits, workers’ comp and payroll service. Most states require workers’ comp from the first employee; some start at a few employees, and Texas leaves it optional for most employers. The premium depends on the work. A payroll service’s published plans start at $35 to $50 a month plus $5 to $7 a person. Enter these in the calculator to see the full cost.

• Workers’ comp rules by state
• Minimum wage by state
• Final paycheck laws by state
• Pay frequency requirements by state
• Payroll services: published prices compared
• Employer setup by state: the accounts to open

The table and calculator assume a business with fewer than 10 employees, so employer shares of paid leave that start at a larger size are left out. City taxes, the Additional Medicare Tax on high wages and income tax withholding are left out too.

IRS Publication 15 (2026), Employer’s Tax Guide; Instructions for Form 940; each state’s labor and revenue agency pages for unemployment tax and payroll programs; each payroll provider’s published price page.

Rates checked October 24, 2026. How we check facts.